Yan, Mei Mei (aka Quinnie Wong) v Deputy Commissioner of Taxation
[1998] FCA 1053
•27 JULY 1998
FEDERAL COURT OF AUSTRALIA
BANKRUPTCY – application for adjournment of the hearing of a petition based on the debt – whether prejudicial to make sequestration order when proceedings in the AAT and criminal proceedings still on foot – evidence that funds possibly belonging to the debtor have been removed from Australia – whether adjournment would be prejudicial to the creditor – whether “any matter of bankruptcy” in s 29(4) includes matters arising under s 50 – a court of a country other than Australia may be required to act in aid of a trustee in control of debtor’s estate under s 50.
Bankruptcy Act 1966 (Cth) ss 29(4), 50, 77E, 81A
MEI MEI YAN (aka QUINNIE WONG) v DEPUTY COMMISSIONER OF TAXATION
NG 7468/97
EMMETT J
SYDNEY
27 JULY 1998
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 7468 of 1997
RE:
MEI MEI YAN (aka QUINNIE WONG)
DebtorEX PARTE:
DEPUTY COMMISSIONER OF TAXATION
Petitioner
JUDGE:
EMMETT J
DATE:
27 JULY 1998
PLACE:
SYDNEY
THE COURT ORDERS THAT:
The petition be stood over to Friday 16 April 1999.
Pursuant to section 50(1)(b) of the Bankruptcy Act 1966 (Cth) the debtor execute such instruments and generally do all such acts and things in relation to her property and its realisation as are required by the trustee (provided that any such instruments do not tend to incriminate her).
Pursuant to section 50(1)(b) of the Bankruptcy Act the provisions of section 81A of the Bankruptcy Act apply to the affairs of the debtor as if she were a bankrupt.
Pursuant to subsection 50(2) of the Bankruptcy Act the debtor be summoned for examination at a time and place appointed by the Registrar after consultation with the parties.
THE COURT DIRECTS THAT:
Both parties approach the Administrative Appeals Tribunal with a view to setting a date for the hearing of the debtor’s taxation appeals in March 1999.
THE COURT GRANTS:
Liberty to either party to apply on seven days notice to the other.
THE COURT ORDERS THAT:
The parties’ costs of the adjournment application of 23 January 1998 be the parties’ costs of the petition.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NG 7468 of 1997
RE:
MEI MEI YAN (aka QUINNIE WONG)
DebtorEX PARTE:
DEPUTY COMMISSIONER OF TAXATION
Petitioner
JUDGE:
EMMETT J
DATE:
27 JULY 1998
PLACE:
SYDNEY
EX TEMPORE REASONS FOR JUDGMENT
HIS HONOUR: On 12 June 1998 I gave interim reasons for adjourning the hearing of the petition until today. The reason for the adjournment at that stage was to enable the Commissioner of Taxation (“the Petitioner”) to adduce evidence in support of a further ground of opposing the adjournment of the petition to April 1999. When the matter resumed this morning I admitted evidence in the form of witness statements and related documents which comprised the prosecution brief in the criminal proceedings to which reference was made in my earlier reasons.
I have been taken briefly to statements in those documents. As I understand it, it is accepted that the material in the statements establishes, at least for the purposes of this interlocutory hearing, that Quinnie Wong (“the Debtor”) was instrumental in sending substantial funds overseas to various named persons, some of whom appear to be related to her. In respect of that conduct, she has used names other than her own.
However, there is also evidence before me to the effect that during the period in question the Debtor had sole responsibility for the care of school-aged children. She has four children born in 1980, 1981, 1990 and 1993. During the period in question the children resided with her at her house at Kingsford. Her husband, Duncan Lam, also resided with her during that period, although she has not seen him since 4 May 1997. He did not return on that evening. When the Debtor returned home in the afternoon of the following day, she found police searching the home. She understands that there is a warrant outstanding for her husband’s arrest. There is evidence before me that the Debtor believed that her husband was a businessman and a person who engaged in gambling on a regular basis.
If it is true, as has been alleged, that he was involved in the illegal importation of drugs, there is evidence before me that she had no knowledge that he was involved in such activities. There is also evidence before me that the Debtor received no payment for personal services which she provided to the Golden Kingdom Restaurant from time to time and that she did not carry on any business either alone or together with any other person or own any property other than the family home at Kingsford. It is contended on behalf of the Debtor that in the light of that evidence, even if I accept that there is credible evidence that she participated in the transfer of funds overseas, I should not conclude that those funds were her property.
It is difficult for me, on the present state of the evidence before me, to form any view one way or the other as to whether the Debtor was the owner of the funds which appear to have been sent overseas with her assistance and participation. It is at least arguable, however, that an inference should be drawn that she had some interest in the funds just as it is arguable that an inference should be drawn on the material before me that the funds belonged to someone else, such as her husband, or his associates.
I have already indicated in the reasons which I gave on 12 June 1998 that I have concluded that it would be prejudicial, given the present state of the appeal to the Administrative Appeals Tribunal, for the Debtor to be made bankrupt. On the other hand, the fact that it is possible that substantial funds which may have belonged to the Debtor have been removed from Australia indicates that I should be slow to defer the hearing of the petition indefinitely unless arrangements are put in place to ensure that the possible detriment to the creditors, if ultimately a sequestration order is made, is avoided.
I have before me evidence that officers of the Official Receiver's office are of the view that provisions of the Bankruptcy Act 1966 (Cth) (“the Act”) which might be utilised if a sequestration order were made are not available pending the hearing of the petition. However, the Court has already made an order under section 50 of the Act which provides as follows:
(1)At any time after a bankruptcy notice is issued in relation to a debtor but before the debtor becomes a bankrupt, the Court may:
(a)direct the Official Trustee or a specified registered trustee to take control of the debtor's property; and
(b) make any other orders in relation to the property.
The Court has made orders under section 50 and property of the Debtor has been the subject of control pursuant to section 50. The Petitioner, however, has expressed concern that other provisions, and specifically the provisions of sections 81A, 77E and 29 of the Act, might not be available pending the hearing of the petition and that, if ultimately a sequestration order is made, the delay between now and such a time might make it more difficult for a trustee in bankruptcy to pursue funds which are ultimately demonstrated to belong to the Debtor.
However, in the course of argument, it appeared that a course is available to me which will accommodate the respective interests of the Debtor and the Petitioner. As I have said, section 50(1)(b) authorises the Court to make any order in relation to the property of the Debtor. Section 50(2) provides as follows:
The Court may, at any time after giving a direction under section 50(1), summon the debtor or an examinable person in relation to the debtor for examination under section 50 in relation to the debtor.
Under subsection 50(5), for the purposes of the examination subsections 81(2) to (17) apply with any modifications prescribed by the regulations.
Section 29(4) of the Act provides as follows:
The Court may request a court of an external territory or of a country other than Australia that has jurisdiction in bankruptcy to act in aid of and be auxiliary to it in any matter of bankruptcy.
I consider that the phrase "any matter of bankruptcy" is apt to include the power of the Court under section 50. Further, I consider that an order under section 50(1)(b) could extend to requiring the Debtor to execute instruments and generally do acts in relation to property within the meaning of section 77E. It follows, in my view, that by making appropriate orders under section 50 I would be able to ensure that the interests of the creditor are unlikely to be prejudiced to any greater extent than they would be had a sequestration order been made today.
The circumstances which arise before me are the result of the court system in the sense that the petition depends upon the outcome of the appeal to the Tribunal which itself is dependent upon resolution of the criminal proceedings. This Court has no control over either of those proceedings. In the circumstances, it seems to me to be proper to adjourn the hearing of the petition to a date some days before the date of expiry of the petition and, in the meantime, to make appropriate orders under section 50 to ensure that any investigation and other steps which the Trustee is advised to take can be taken.
I have also formed the view that the conduct of both Petitioner and Debtor in relation to the matter has not been unreasonable, such that it is appropriate that the costs of this adjournment application and of the earlier hearing be regarded as the parties' costs of the petition. In the circumstances and for the reasons which I have briefly outlined I make orders in accordance with the short minutes which I have initialled, dated with today's date and which I have placed with the papers.
I certify that this and the preceding three (3) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.
Associate:
Dated: 27 July 1998
Counsel for the Petitioner: P. Roberts Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: D.M.J. Bennett QC with A.J. O’Brien Solicitor for the Respondent: John Walsh & Partners Date of Hearing: 27 July 1998 Date of Judgment: 27 July 1998
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